Dr. Russell:
We are an oncolytic virotherapy company based in Rochester, Minnesota, and
we are essentially using viruses as a novel cancer therapy.

CEOCFO: Why should viruses work?

Dr. Russell:
Viruses naturally infect and damage or destroy tissues in the body and
everybody understands that. Hepatitis damages the liver, HIV damages the
immune system, flu virus damages the lungs, etcetera. The idea here is have
viruses that specifically attack a cancer and kill cancer cells, and in so
doing not only shrink the tumor but also provoke an inflammatory immune
response so that the immune system is much better equipped to mop up those
tumor cells that did not get infected. It combines those two methods of
killing the cancer: direct viral infection and spread in the cancer, killing
the cancer cells, followed by immune mop-up of residual cancer cells.

CEOCFO: Is it generally accepted that this
could work? Where is it in the continuum of the oncology community?

Dr. Russell:
Itís mid-stage I would say in terms of its development. There are several
oncolytic viruses currently being developed by different groups. The one
furthest down the road in terms of FDA approval process is a virus that
Amgen currently owns called T-Vec, or IMLYGIC, and thatís a herpes simplex
virus thatís been engineered to make it cancer specific, and also so that it
can more efficiently boost the immune system. Thatís been approved for the
treatment of malignant melanoma. It was approved at the end of last year
both in the USA and in Europe, and itís given repeatedly by intratumoral
injection into a skin lesion, which results in the regression of other skin
lesions and sometimes deeper tumors, so called visceral tumors. Thatís one
virus, but there are quite a few studies using other viruses (including the
viruses we are developing at Vyriad) that have generated early clinical data
indicating that even a single dose of a virus given intravenously or
intratumorally can mediate wholesale destruction of cancer anywhere in the
body.

CEOCFO: Where have you started? What
viruses, why, how, what are you aiming for?

Dr. Russell:
We have been founded based on work that was done at Mayo Clinic. Mayo Clinic
has, since 1998, had a major academic translational research effort in
oncolytic virotherapy. Multiple different viruses have been developed and
tested pre-clinically there, and the two leading viral platforms that have
been taken to clinical trials are measles and vesicular stomatitis virus.
Those are the two platforms that Vyriad has licensed and is taking forward.
In fact, at Mayo already there were three completed Phase I clinical trials
using measles and one ongoing Phase I trial using the VSV when Vyriad was
founded. It was a pretty strong academic platform from which we can launch
into the commercial arena.

CEOCFO: Would you tell us about the recently announced
agreement with Imanis Life Sciences?

Dr. Russell:
Well, Imanis Life Sciences is a Rochester based service provider which
Vyriad has been working closely with to have new viruses made and tested in
various different ways. Imanis Life Sciences had intellectual property that
covered the use of viruses as diagnostics. Because we want to, as we move
forward, be able to more accurately identify those subsets of patients who
are going to have good responses to virotherapy, we think a predictive test
makes great sense for increasing the probability of product approval in
Phase III clinical trials when we get to those. So weíve joined forces with
Imanis Life Sciences and are working to develop diagnostic tests that use
these viruses engineered in different ways, applied to tumor cells in order
to determine whether the patient is going to be likely or not to respond.

CEOCFO: Where do you start - how do you
know which virus and what dosage might be a good baseline? What goes into
that initial decision?

Dr. Russell:
It is the standard Phase l dose escalation process that one goes through
with a lot of FDA input to determine the dose levels that ought to be used.
Interestingly for oncolytic viruses this is very different from small
molecules, in that the dose ranges are enormous. So our starting dose with
measles was 1,000 infectious units given to patients with ovarian cancer,
and the top dose we ever gave was 10 million times higher than the starting
dose. What dose is ultimately used will depend on clinical outcomes, both in
terms of toxicity and anti-tumor activity, as well as ease of manufacturing
at high versus lower dose levels. As you would expect, there are many
factors taken into consideration in determining what an appropriate dose is.
Fundamentally, itís down to the therapeutic index; the efficacy, toxicity
sweet spot, or efficacy with no toxicity.

CEOCFO: Are you funded? Are you
seeking additional partnerships or investment?

Dr. Russell:
We have money in the bank. We have had some angel investment right at the
get go, and we also licensed one of our products to AstraZeneca and that
deal provided additional capital to get the company moving. Right now, we
are moving towards a private offering in order to raise money through that
mechanism. In addition, we are exploring the possibility of working with a
major venture capital firm - we are talking to more than one of those.

CEOCFO: You recently appointed Dr.
Alice Bexon as your chief medical officer; what will her role be and why
now?

Dr. Russell:
Sheís a really phenomenal addition to the team. Alice has a great deal of
experience developing drugs in a large pharma environment and subsequently a
small biotech before she launched her own company, which essentially
provides services to small companies getting in to the area of developing
their own drugs. What we already had in our company before the arrival of
Alice was a team that was very familiar with translating oncolytic virus
therapy from lab to clinic in an academic setting, but not in a
pharmaceutical setting where the rules of engagement are quite different. So
having Alice Bexon join us has really greatly empowered us to aggressively
move forward with our company sponsored clinical trials. We already have our
first two INDs approved. One for the use of measles virus in patients with
lung cancer, and the other for the use of VSV coding for interferon beta and
NIS (the thyroid sodium-iodide symporter) in a Phase I intratumoral all
comers dose escalation trial.

CEOCFO: Is it easy to get people to participate in trials
in this particular arena?

Dr. Russell:
Itís increasingly attracting the attention of patients who are looking for
experimental therapy. I think in that domain of cancer care where
conventional therapy has failed thereís definitely a great deal of interest
in exploring oncolytic viruses. With the approval of Amgenís product,
thereís gradually an increasing acceptance, not just by the patients but
also by the treatment centers that are being asked to use oncolytic viruses.
There are some additional considerations when using viruses as therapy
versus using conventional small molecules because you have to think about
the possibility of the virus infecting someone other than the patient. So
there are containment issues. Those are relatively straight forward, but
theyíre nevertheless something that I think people need to be familiar with
before theyíre comfortable using the oncolytic viruses.

CEOCFO: What surprised you
throughout the process so far as you have been working in this area and with
these drugs?

Dr. Russell:
That is a difficult question. Iím not sure that Iíve found things surprising
so much as interesting and fun engaging with the process of drug development
in a commercial setting. I do think itís wonderful that thereís such an
enthusiastic reception for a completely new modality to be used in the
cancer armamentarium. Possibly, the most surprising development in recent
years has been the demonstration that we really can harness the immune
system to attack cancer. There were so many years of animal experiments that
did not translate to human success, and then with the advent of the
Checkpoint Inhibitor Antibodies, it became clear why the immune system was
not really helping cancer patients and how it could actually be engaged. I
think with that major advance in the field oncology, the use of oncolytic
viruses as a cancer therapy really has come into its own because a great way
to wake the immune system up and to help it to recognize the cancer and use
in conjunction with these Checkpoints Inhibitor Antibodies, you can then
allow the immune system to have at the cancer.

CEOCFO: There are many companies in
healthcare and many new ideas? Why pay attention to Vyriad today?

Dr. Russell:
Well, in the oncolytic virotherapy space, I think we really have some
significant advantages. We are clinical stage and we do have data with our
viruses showing systemic efficacy. This is a major goal of oncolytic
virotherapy, to show that they can be active when given into a vein as
opposed to when injected directly into a tumor, so thatís important. We have
a very strong team; we have a team of people who are very familiar with
manufacture, pre-clinical toxicity testing and translation to the clinic of
oncolytic viruses. Weíve also now have Alice Bexon on-board as our CMO with
her company in tow to assist us with that process, so thatís a real
strength. We have an excellent and broad portfolio. We have more than one
oncolytic virus in our company, in fact we have two that are clinical stage
and then we have a pipeline of additional viruses and technologies because
we envision viruses as a whole new domain of therapeutics that will be used
in combination and sequentially. One of the interesting things about
viruses, versus the conventional small molecules, is that the immune system
is configured in such a way that when it sees a virus a second or third or
fourth time, it much more efficiently eliminates the virus. So sequential
use of different viruses we think will be very important. All in all, we
think we really are a very strong company in that space, and the other thing
about us in relation to our fundraising efforts right now, is that we are
ready to move extremely aggressively with two FDA-approved clinical trials
ready to launch immediately. Those are the key strengths of our company.

ďWe are clinical stage and we do have data with our viruses showing systemic
efficacy. We have a very strong team. We have an excellent and broad
portfolio. All in all, we think we really are a very strong company in that
space, and the other thing about us in relation to our fundraising efforts
right now, is that we are ready to move extremely aggressively with two
FDA-approved clinical trials ready to launch immediately.Ē- Stephen J.
Russell MD PhD